Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
24 May 2005
Case Brief
On April 29, 2005, the Reserve Bank of India cancelled the certificate of registration of Bhojwani Leasing and Finance Limited, Mumbai, which had been granted for carrying on the business of a non-banking financial institution. As a result, the company can no longer transact NBFC business. The release also says the company is prohibited from accepting deposits and from alienating assets, under Sections 45MB(1) and 45MB(2) of the RBI Act, 1934.
Why RBI Acted
The Reserve Bank of India cancelled the certificate of registration granted to Bhojwani Leasing and Finance Limited on April 29, 2005 for carrying on the business of a non-banking financial institution. The release states that, following cancellation, the company cannot transact NBFC business and has been prohibited from accepting deposits and alienating assets. The order cites Section 45IA of the RBI Act, 1934 as the source of RBI’s power to cancel the registration certificate, and Sections 45MB(1) and 45MB(2) for the deposit-acceptance and asset-alienation prohibitions.
Operating Impact
Bhojwani Leasing and Finance Limited must stop operating as a non-banking financial institution and cannot accept deposits or dispose of its assets. The action directly affects the company and protects depositors and counterparties from further NBFC activity by the firm.
Regulatory Basis
- Section 45IA of the Reserve Bank of India Act, 1934
- Section 45MB (1) of the Reserve Bank of India Act, 1934
- Section 45MB (2) of the Reserve Bank of India Act, 1934
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 29 Apr 2005
- Effective From
- 29 Apr 2005
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC